Palmer plugs switch to green fuel

Queensland businessman and political candidate
Clive Palmer
has reignited calls for mandatory ethanol use in cars.

The Palmer United Party has set a 10 per cent target for vehicles running on ethanol-based fuels by the end of 2016. Its federal leader said the target should increase to 25 per cent by 2020.

“Long term, Australia needs to move to alternative energy sources and ones that are more environmentally friendly," Mr Palmer said on Monday after he launched his ethanol policy. “It makes good sense to use energy we can grow."

Sugar growers have suffered from a 40 per cent plunge in prices since reaching a three-decade high in 2011 as global supply has increased. Sugar cane can be used to make ethanol. Global production will fall 1.2 per cent to 180.8 million tons, the first drop since 2008-2009, while demand will expand 2.1 per cent to 176.3 million tons, an International Sugar Organisation said last month.

The ethanol industry has benefited from more than $530 million in subsidies since 2003 and some states already have a target: NSW requires 6 per cent of the total volume of petrol sold in the state to come from ethanol.

Companies including Shell and Caltex provide ethanol-blended fuels through service stations, and the major ethanol production facilities are centred in Queensland.

The largest is run by the
Manildra Group
.

“Australia lags behind other countries when it comes to addressing climate change, and this policy will help us meet our obligations under the Kyoto Protocol," Mr Palmer said.

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Mr Palmer said that regional areas which relied on the sugar industry, such as Mackay, had been neglected by the major parties.

“Australian sugar prices are not as competitive as they used to be," he said.

“By boosting our use of sugar cane ethanol, the Palmer United Party will help secure the future of these communities which have long been ignored by the major parties."

Critics of ethanol mandates argue they distort markets and increase prices for consumers. They point out that the industry has benefited from production subsidies which the federal parliamentary library calculates at $530 million from 2003 to 2011.

Advocates argue the measures are necessary to force oil companies to supply the alternative fuel at petrol ­stations and the new industry will support jobs in regional areas and shore up Australia’s fuel security.

It is unclear whether a national ethanol mandate will be part of measures considered as the Coalition mulls policies should it win the federal election and seek to abolish the carbon pricing scheme. Opposition Leader
Tony Abbott
centred on the carbon tax as he gave his final national address in Canberra on Monday, although it is not clear whether an ethanol mandate might be part of the options the Coalition would consider.